How to Apply ‘The New Rules of Money’ to Master Your Finances
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What is the main topic discussed in this episode?
Listen at schwab.com slash washingtonwise.
Here's your money briefing for Tuesday, December 5th.
What is The New Rules of Money and who is Julia Carpenter?
I'm J.R. Whalen for The Wall Street Journal. People trying to manage their personal finances often go off track by applying an old set of rules. A new book from The Wall Street Journal guides you through the new rules of money to help you reach your financial goals.
So often we have milestones set for us. You graduate from college and you think, okay, I'm immediately supposed to set forth on this path that my parents were on and my grandparents were on. And I talk to a lot of people who don't even want those milestones. They don't want to own a home right now or they don't want to get married. And setting your own milestones then also allows you to reorder that path and tailor it to your own experience.
We'll talk to Wall Street Journal personal finance reporter Julia Carpenter after the break.
Listen at schwab.com slash washingtonwise.
Managing our personal finances is something many of us do every day, but a changing set of rules can create obstacles toward reaching our goals.
Why did the authors write a workbook-style personal finance book?
Wall Street Journal personal finance reporter Julia Carpenter is co-author of the new book, The New Rules of Money, and she joins me now. So, Julia, why did you and personal finance deputy coverage chief Beret Lam feel the need to write this book?
One of the things Beret and I talked about early on is how so much financial advice that we've read or asked from advisors or talked to experts about is not for everyone. It's very beginner. This is how you open a bank account. This is how you understand what your cash flow is. Or it's incredibly advanced about, you know, calibrating your investments.
How can setting your own financial milestones change your plans?
And there's not something that speaks to everyone or that helps people who are literate a little bit but not feeling confident in themselves. And we were actually really inspired by cookbooks for this, kind of a similar thing. You think about opening like Claire Saffitz's Dessert Person and someone who wants to make a sugar cookie can make a sugar cookie or someone who wants to make The croquembouche can make the croquembouche. Or maybe the croquembouche person wants to make a sugar cookie that day. And we were thinking, what is something we can do that feels like that? That it's not condescending, but it's also not making assumptions about your knowledge already.
How do you break big goals into achievable financial milestones?
Ah, I like that. Cooking in the kitchen and personal finances coming together.
It's really similar when you think about it. You know, you learn by doing. And that's really what personal finance is too. You don't just make a croquembouche if you've never made a sugar cookie.
Let's talk about some of the new rules that people should know about. In the book, you talk about the importance of setting milestones. Why is that important?
So often we have milestones set for us. You graduate from college and you think, OK, I'm immediately supposed to set forth on this path that my parents were on and my grandparents were on and I see other people on. And if I'm not meeting these things in the same time that they were meeting them, I'm doing something wrong. And I talk to a lot of people who don't even want those milestones.
Why are habits central to improving personal finances?
They don't want to own a home right now or they don't want to get married or their goal is to one day quit their job and work for themselves. And setting your own milestones then also allows you to reorder that path and tailor it to your own experience.
How would somebody do that?
So the first thing we talk about in the book is identifying achievable milestones. Example, I want to own a house one day. I don't own a house right now. I can't just put own a house on my to-do list. What I can put is save for a down payment. Talk to a real estate agent.
How can you identify and replace bad money habits with better ones?
Talk to a friend who is a homeowner. When I'm saving for that down payment, where do I want to put it? How much money do I need? All of these little mini goals that lead up to this bigger milestone. And so for me, then, a more achievable milestone is get X number of dollars in my down payment account by the end of the year.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:01–0:31
2
What is The New Rules of Money and who is Julia Carpenter?
0:31–2:05
3
Why did the authors write a workbook-style personal finance book?
2:05–2:41
4
How can setting your own financial milestones change your plans?
2:41–3:19
5
How do you break big goals into achievable financial milestones?
3:19–4:01
6
Why are habits central to improving personal finances?
4:01–4:35
7
How can you identify and replace bad money habits with better ones?
4:35–5:54
8
What does a practical financial review ('Know Your Numbers') look like?
5:54–10:03
Speakers
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